The Importance of Title Insurance
Most property buyers understand that a title search is needed to ensure that they receive the valuable title at closing. However, there is some problem with the title, which cannot be found even with the most thorough title search.
This includes things such as forgery, fraud, mistakes by the office of the Registrar's Office in the recording of deeds, mechanic liens, conveyance by the minor or the person is not mentally competent, heir undiscovered or ex-spouse who returns to claim interest, and other issues.
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A title insurance policy protects you from losses. A title insurance "Lender" policy provides protection to the lender.
An "owner" title insurance policy protects the owner's equity of real estate property, which is the difference between the amount the lender title insurance policy, any liens or encumbrances on the property, which is specifically excluded in the policy.
Remember that the title insurance policy does not guarantee that problems will not occur, but it protects you from losses due to title defects. Title insurance also pays the legal costs involved in defending your rights. Despite the loss of the title that is rare, they can be very expensive and time-consuming when you are not properly insured.
Owners Title Insurance may not be included on your good faith estimate as some lenders in certain countries do not require it. Also in some countries, it is the responsibility of the seller to pay and provide it.